Demand for fertilizer and industrial nitrogen products remained strong overall in 2013, based on continued healthy farm margins and a modest recovery in the global economy. However, increased export supply from China saw commodity nitrogen fertilizer prices fall during the year, moving closer to supply-driven conditions, compared with strongly demand-driven pricing in 2012. Margins for most fertilizer products therefore declined in 2013, but higher-value fertilizer margins were more resilient, generating stronger premiums compared with commodity fertilizers.
Yara delivered solid financial results in 2013, with net income after non-controlling interests at NOK 5,748 million. However, the result was almost halved compared with 2012, primarily reflecting lower commodity fertilizer prices. Earnings per share were NOK 20.63 in 2013, compared with NOK 37.31 in 2012. Operating income was NOK 7,791 million, down from NOK 11,159 million in 2012, while EBITDA was NOK 13,266 million, compared with NOK 16,970 million in 2012. Revenue and other income was NOK 85.1 billion in 2013, up from 84.5 billion in 2012.
Cash flow and financial position
Net cash from operating activities was NOK 12,174 million, reflecting strong earnings based on a continued strong market situation for Yara’s products. Net cash from operating activities in 2012 was NOK 13,233 million. Net cash used for investing activities in 2013 was NOK 9,259 million, reflecting the acquisition of Bunge’s fertilizer business in Brazil in addition to planned maintenance, continuity and organic growth investment activity.
Yara’s financial position remained strong in 2013. The debt/equity ratio increased from 0.02 to 0.06, as strong cash inflows funded increased investing activities and cash returns to shareholders. Net interest-bearing debt at year-end was NOK 3,378 million, while total assets were NOK 88,980 million. Total equity attributable to shareholders of the parent company as of 31 December 2013 amounted to NOK 54,267 million. At the end of 2013 Yara had NOK 6,819 million in cash and cash equivalents and approximately NOK 14,614 million in undrawn committed bank facilities. We consider the company’s cash and financial position to be strong.
In the opinion of the Board of Directors, the consolidated financial statements provide a true and fair view of the group’s financial performance during 2013 and financial position at 31 December 2013. According to section 3–3 of the Norwegian Accounting Act, we confirm that the consolidated financial statements and the financial statements of the parent company have been prepared based on the going concern assumption, and that it is appropriate to make that assumption.
The Downstream segment delivered an EBITDA of NOK 4,013 million and a CROGI of 14.5% in 2013, compared with respectively NOK 3,905 million and 15.3% in 2012. Fertilizer deliveries increased but special items reduced EBITDA by NOK 294 million. Margins were stable overall.
The Industrial segment delivered an EBITDA of NOK 1,096 million and a CROGI of 12.3% in 2013, compared with respectively NOK 1,111 million and 12.7% in 2012. Deliveries increased and margins were stable overall, however the 2012 result included positive special items of NOK 76 million.
The Upstream segment delivered an EBITDA of NOK 7,919 million and a CROGI of 11% in 2013, compared with respectively NOK 11,849 million and 16.2% in 2012. The Upstream result was impacted by a significantly year-over-year reduction in commodity nitrogen fertilizer prices, in addition to somewhat higher energy cost.
Net income after non-controlling interests
Yara International ASA
The parent company Yara International ASA is a holding company, with financial activities and non-material operations. Yara International ASA had negative net income of NOK 386 million in 2013, down from a positive NOK 4,656 million in 2012, after dividends and group relief from subsidiaries of NOK 731 million (NOK 4,053 million in 2012). The net foreign exchange loss was NOK 1,826 million compared with a gain of NOK 190 million in 2012.